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Mexico Mining Forum 2015

Mexico Mining Forum 2015

Competitiveness of the Mexican Mining Industry

Mario Cantú Suárez, General Coordinator of Mining, Ministry of Economy
Mario Cantú Suárez

Mario Cantu greeted the audience on behalf of the Minister of Economy, Idelfonso Guajardo, and wished Mexico Mining Review success on its release. Speaking about the advantages of Mexico’s business environment, Cantu stated that the competitiveness of the Mexican mining industry was related to the governance of Mexico’s mining resources, and the detonation of the country’s present and future mining potential. This is also linked to Mexico’s potential to attract foreign investment, which in 2012-2014 was only below Chile and Peru in Latin America, according to the Fraser Institute and 18th out of 122 jurisdictions worldwide. Among the factors that affect investment, Mexican regulations ranked well, although these need to be standardized to help the sector thrive at the lowest cost possible. Mexico also ranked higher than most Latin American countries when it came to geological data availability. However, a lack of sophisticated fiscal schemes and security harm Mexico’s investment attractiveness.

Cantu then moved on to the governance of mining resources in Mexico. He stated that, in terms of social responsibility, all companies must always consider the integration, exploration, and tailings dams, while respecting the communities who own the land. These are aspects that the mining sector must see as sacrosanct as it will guarantee its future and ensure that how steady jobs are created.

Regarding fiscal legislation, Cantu said that Mexico has seen preliminary results in terms of collection. Prior to the new law in 2013, Mexico was the only major mining jurisdiction that was not providing royalties. Furthermore, the money collected from the royalties will go to the Fund for Sustainable Regional Development in Mining Municipalities. This will ensure that revenues are evenly distributed among mining municipalities in mining states. In the same vein, Cantu spoke about the Mining Development Program which sets precise indicators to audit the development of the sector. These targets were not reached in 2015 but SMEs will receive more help starting in 2015 so that these targets will be met. 

Incentivizing Exploration under Present Market Conditions

Incentivizing Exploration under Present Market Conditions

Moderator: Mario Arregoytia, Lead Partner for Mining and Metals for Mexico and Central America of Ernst & Young
Panelist: Alberto Orozco, Vice-President of Exploration, Argonaut Gold
Panelist: Raúl Cruz, Director General of SGM
Panelist: Armando Pérez Gea, Director General of FIFOMI 
Panelist: Alain Charest, Country Manager and Senior Geologist of EvrimResources

To introduce the theme, Arregoytia spoke about the importance of mining investments to almost all industries, requiring long-term targets and goals to ensure its continued profitability despite its cyclical nature. This nature brings about highs and lows of volatility which impacts the way mining companies settle on these long-term targets and goals. Arregoytia stated that for the sake of the global economy, mining must always continue but this presents certain major challenges. For example, gold and silver reached high peaks during 2011-2012 when their upward cycle ended and a downward trend began. While lead and zinc were not so affected by this trend, copper and iron similarly saw downfalls starting at this time. The implications of this trend include the fact that investments in mining exploration may be cut since these investments mirror the downfall of the metals, reaching a peak in 2012 and falling thereafter. This is due to mining companies being under pressure from investors to ensure short and medium-term profits. Investors only see mining as a good investment when prices are high. In such times, Arregoytia stated that investors may steer away from mining, leaving few funds around to ensure further exploration investment. Some majors have the cash flow to continue but these are not in the majority as many projects have stopped. However, these volatile times provide a good backdrop to review exploration strategies to review which projects are worth exploring and exploiting.

Alberto Orozco was asked how this cycle of volatility was impacting Argonaut Gold, which is a newer mining company that focuses primarily on gold. Orozco announced that his company was facing low prices and high costs. Argonaut is trying to control costs and exploration has been affected as a result of this. In 2013, Argonaut had a large portfolio of projects with high exploration risks. Sadly, since exploration has been affected, Argonaut is assessing what to keep, what potential lies in forming joint ventures, and which projects will bring in high profits. Mostly, the company focuses on brownfield exploration projects, which can be seen as strong opportunities even in tough times.

Given the exploration experience of Evrim Resources, Alain Charest was asked how he is maximizing the project he gets to keep. Charest answered that all exploration companies in Mexico and Canada are in survival mode. To get out of this dangerous situation, the industry must learn how to attract Canadian investors once again. To do this, a radical transformation is necessary. Charest pointed to a time 30 years ago when the mining industry already transformed itself to seek to curb a trend in dwindling profits. He pointed to China as the largest gold producer in the world, which produces 13 billion ounces a year. However, only one Chinese gold mine could be considered big since most mines are very small. He encouraged mining companies in Mexico to see the potential of smaller mines, since larger deposits have been exploited. This movement must come from major companies so that exploration companies change their focus to smaller prospects, given the potential to increase gold and silver resources in Mexico in this way.

In a continuing theme, Arregoytia asked Raúl Cruz what the SGM was doing to support Mexican exploration efforts in this time of low prices. The answer from the SGM leader was that exploration lay at the heart of the mining industry. People who do not know their geology cannot assess or exploit their resources, making exploration all the more important to increase wealth around the world. SGM has been seeking to help exploit Mexico’s resources as much as possible, by creating maps and carrying out geological studies. Cruz says that SGM now understands which regions of Mexico have the potential for mineral or hydrocarbon reservoirs and can now better assess where to drill. To help curb this downward exploration trend, SGM will continue this strategy, look for new deposits and for new ores previously unfound in Mexico. It will then share that information with the sector to help boost flagging private geological efforts. He gave the example of a very successful gold/silver/lead/zinc/copper in Zacazonapan that was exploited due to SGM findings.

Mario Arregoytia stated that FIFOMI is essentially a bank for the mining sector and asked Armando Perez Gea how the Mining Development Program would help revive flagging exploration fortunes. Pérez Gea answered that, in the MDP, the onus is put on the development of innovation. Companies need to talk about new prices and market conditions but overall, companies need to become more efficient and innovative, regardless of costs. He stated that the federal government would be willing to innovate along with the private sector. The MDP states that this innovation should not only be focused on majors but should also promote the development of SMEs. To help SMEs, FIFOMI is now obliged to finance mining SMEs both in production, processing, and exploration. Therefore, FIFOMI will begin ramping up project financing, under a scheme that would provide appropriate collaterals according to different priority conditions. As a small entity, FIFOMI has a small portfolio of less than MX$3 billion but this gives it far more flexibility in what projects it choose to finance and how. It works with the SGM and its own experts to carry out its investigations and assess which projects are the most attractive. Furthermore, our ceiling for investment has increased from US$5 million to US$25 million to help SMEs in a larger way. Besides that, Cruz believes the government should also be a partner in exploration projects and FIFOMI is happy to partner up with the commercial banking sector for projects needing more than the US$25 million ceiling.

Impact of Mexico's Reforms on the Mining Industry

Impact of Mexico's Reforms on the Mining Industry

Moderator: Karina Rodríguez Matus, Partner of Pizarro-Suárez y Rodríguez Matus Abogados
Panelist: Eduardo Salgado, Partner and National Industry Leader, Mining at KPMG
Panelist: Ricardo López Pescador, Mining Leader of SEDATU
Panelist: José Martínez, President of Grupo Jomargo and CEO of Minera La Luz
Panelist: Iván Moguel, Partner at Chevez Ruiz Zamarripa

Karina Rodriguez began by telling that the amendment of the mining and fiscal reforms have impacted the industry. The legislative changes include penalties on mines that have been inactive in two years and royalties. The Energy Reform also had an impact on the mining industry, as preference for the use of land was given to hydrocarbons. Thus, mining will compete with the energy industry under unequal conditions. Gas associated with coal fields is now regulated by the energy regulation. “We do not know the exact impact, but these changes will certainly affect mining activities. We will examine how these amendments will affect Mexico's competitiveness in terms of competing with other countries in attracting investments,” she explained. Rodriguez asserted that a competitive company has low costs to compensate for the fluctuations in prices. Other factors that contribute to business competitiveness include the continuity of operations and the viability of new projects. The legal regime, tax matters, and security, she noted, all affect the country's competitiveness.

Ivan Moguel began claiming that there clearly has been an impact in competitiveness because of the change in the income tax, which alters deductions in the pre-production stage. In his view, the law does not consider inflation. Legislative changes and reforms in 2013 halted investment because of the way they impacted cash flows in the industry. Social benefits of workers cannot be deduced as they were before. He mentioned that Mexico has a competitive income tax rate of 30%. “Compared to other countries, the nominal rate is good.” However, when looking at elements that can no longer be deduced, the effective real rates reported by companies are much higher than 30%, making Mexico no longer competitive. Moguel claims the 7.5% royalty has raised questions on how to implement this tax, mainly because companies are confused about what they have to declare in terms of extraction or production.

Eduardo Salgado believes new taxes are definitely affecting companies. “We have observed that after the first fiscal year with the new taxes, companies did see the new fiscal regime affect their revenues,” he expressed and added that Mexico is now less attractive than countries with other fiscal regimes. The introduction of rights and new taxes in combination with the global state of the mining industry have a negative impact on companies. “These are also areas of opportunity that should be examined in Mexico,” he concluded.

Jose Martinez drew distinctions between the types of mining activities in Mexico and the way each has been affected. First, he said there are companies involved in several industries. These are not severely affected because of the diversification of their business. Then there are Canadian companies with operations in different countries, which still safeguard their position in the stock exchange. Third, foreign companies operating exclusively in Mexico are highly affected in the stock exchange and in their operational revenues. Finally, small and medium-sized companies are severely affected in their revenues. For Martinez, taxes and royalties should be proportional to the magnitude of mining activities.
“Just because Canadian companies have not left and some small and medium sized companies are still working does not mean the industry is doing well, and we have to educate the authorities about this.” International costs vary every day, and on top of that companies have to deal with country costs and operation costs.

Lopez Pescador stated that, “Given the situation of states and municipalities, does the Mining Fund help these entities ease their financial and credit situation or is it meant to improve the quality of life of mining workers, mainly through infrastructure?” For him, the application of the Fund should be about the second choice. He points out that SEDATU is the continuation of the Ministry of the Agrarian Reform, but with more duties and authorities such as the regulating housing. SEDATU was entrusted with the management and application of the Mining Fund. 65% of this fund goes to municipalities, ensuring that physical investments take place were the mining activities do take place. This will revert the myth of mining companies getting rich at the expense of impoverished communities. SEDATU has the challenge of making this happen by investing in infrastructure with a social impact. Rodriguez summarized the panel saying that the fiscal subject has been difficult to understand an implement.

Canadian Outlook on the Competitiveness of Mexican Mining

Rosalind Wilson, President Mining Task Force of the Canadian Chamber of Commerce
Rosalind Wilson

The Mining Task Force of the Canadian Chamber of Commerce was empowered to become the voice of the Canadian mining industry in Mexico, began Wilson. Today the Task Force is a strong representative of Canada and has helped to build bridges between two countries with strong mining sectors, supportive government policies, transparent permitting processes, established legal systems, and similar geological conditions. The NAFTA agreement also helped to forge those ties. Wilson then approached the matters that attract Canadian investment to Mexico, including education, training, transfers of knowledge and technology, job creation, and respect for the environment. Another reason is the strength of the Toronto Stock Exchange, which is the global leader for mining investment and financing. Its influence in Mexico is also a strong anchor that brings Canadian companies here and offers them access to capital.

Tracking the history of Canadian investment in mining, recent years such as 2012 saw a restriction in financing for mining projects which led to a downturn. However, at the time, Mexico maintained a strong market share for mining investments in Latin America. In 2013, these restrictions grew worse and Mexico lost a great deal of market share. Investment was not as strong due to major uncertainty, according to Wilson, and the Mining Tax Force campaigned vigorously against the new royalty and tax passed by the government that year. She stated that Canadian companies in Mexico have never opposed paying a mining tax in the country but simply want the tax to be fair and for the money raised to be invested in the communities where mining companies are working. Now, the Canadian Chamber of Commerce is happy with the fact that the government has been listening to our advice as to where the money should be spent. Despite this downturn, over 200 companies are still on the TSX with a combined 500 projects in Mexico.

Moving on to another area, Wilson said that recent news have shown the correlation between security and costs. To tackle this, the Mining Task Force is working on a hands-on program with the government that should help to tackle this problem. Wilson was pleased at the government’s response and that a channel was created to discuss such issues. On the legal front, Wilson stated that some progress was made in fixing companies’ uncertainties for the rule of law and obstacles to transparency. As for social acceptance, she felt that any companies now understand the benefits that the mining investment can bring them. However, if Mexico wants to remain competitive as a mining investment destination, it must keep on tackling these issues, including, safety, the rule of law, and social acceptance.

To conclude, Wilson explained that Canada and Mexico are natural partners in mining and beyond, have mutual respect, and the right attitude to overcome the bad times that are still not over. In this way and with strong collaboration, Canada and Mexico can be instrumental in helping mining investment return to the heights it saw in 2010.

Strategies on Capital Prudence, Cost Discipline, and Non-Core Asset Divestment

Strategies on Capital Prudence

Moderator: Alfredo Remy, Mining Leader of PwC Peru
Panelist: Salvador García, COO of First Majestic Silver
Panelist: Luis Chávez Martínez, Vice-President of AuRico Gold
Panelist: Arturo Bonillas, President of Timmins Gold
Panelist: Xavier García de Quevedo, CEO of Grupo Mexico

Remy began the panel by assessing to the way mining companies reacted too slowly to the drop in mining prices. He said that many companies began to tighten their belts a couple of years after the price drop trend began to be evident. Furthermore, the price of metals is not only going to climb only because of the mining market itself. Conflicts around the world, stimulus packages in Europe and Japan, and low oil prices have all impacted the cost scheme of mining companies. China has also reduced its growth objectives to 7%, which seems big, but for China, this is too low a rate and signs of a real slowdown. China also has a major stimulus package which will impact metals.

Remy than asked what indicators could therefore be seen as a sign of a real mining economic recovery. He stated that productivity was just such an indicator around the world as it dropped around the time as prices. Mining companies are focusing on increasing margins, which is part of improving their overall productivity. The ROI on invested capital has dropped over the years to just 5%, which is far too low to satisfy most investors. The impact of this is that most mining executives have now learned to leave aside anything that does not improve ROI, as we see from projects being abandoned and mergers or joint ventures being sought.

Luis Chávez Martínez began with a brief presentation to discuss the matter of Mexican companies with foreign capital and issues of capital prudence and cost discipline. For Chávez Martínez, cost discipline in the mining industry can be boiled down to productivity in operations. During the last upturn, AuRico Gold and many other companies did not imagine that there might be an economic downturn in the short term. Since this downturn has happened, the industry must now analyse what corporate strategies can work to help increase productivity while dealing with higher costs and lower prices. For AuRico Gold, a merger with Alamos Gold was the right solution to deal with this situation. Furthermore, AuRico Gold has divested mines in Chihuahua and Guanajuato, among other projects in Mexico, for which it received US$1 billion which went to its investors. Besides, the company has shed some staff and negotiated contractors, as part of a general capital prudence strategy. The two operations AuRico Gold maintained in Sonora and Ontario, Canada, were also managed closely to ensure they could provide steady cash flow. Overall, the AuRico Gold-Alamos Gold merger will help the company survive through the hard times.

Arturo Bonillas began by saying that Timmins Gold was a medium-sized company and could not match the track records of other panellists. The company is readjusting its plans to adapt to gold selling at US$1000 an ounce. The first question is how the company can finish 2015 while meeting all its financial obligations. However, Timmins Gold is planning ahead to 2021 to ensure it takes the right path. A company must decide whether to simply try and pay salaries or to try and thrive in the long-term. In 2014, there was an argument within Timmins that the company should close if it could not turn a profit in the short-term. However, Bonillas said that the company is flexible and can reinvent itself easily. Therefore, the company staved off any closing fears and based its future on seeking to create wealth in the medium-term by 2018. These changes included renegotiating contracts with suppliers and trained its people to create a long-term basis for Timmins Gold. This strategy will certainly be tested since the average global production cost for an ounce of gold is US$1,500 while the value is at US$1,200 and might drop as low to US$1,000, according to Bonillas.

García de Quevedo began by explaining that Grupo Mexico was very well placed to inform on these financial topics, given their producing mines in Mexico, the US and Peru, as well as with exploration projects underway in Argentine and Spain. Grupo Mexico makes ten-year plans that are periodically reviewed as the company’s exploration, production, and fiscal strategy have to be based on the long-term. Therefore, for García de Quevedo, the most important aspect for a company in fiscal distress is to focus on cost. To help reduce costs, Grupo Mexico has a central resource center which handles all transactions and costs for all of the company’s activities in the world. This allows the mining behemoth to track the costs and expense of every piece of equipment. Another tool works like a traffic light that tracks and alerts when a piece of equipment or a project is not hitting the fiscal targets it should be hitting. Despite being big, Grupo Mexico focuses on big and small projects alike, tracking how all these can contribute to its global reach and profitability. This attention to detail and costs helps the company know how it will invest and grow over the years. García de Quevedo also stated that numerous projects are competing among themselves to receive Grupo Mexico investment and many aspects are studied to decide where the company will invest. After this, project management is absolutely crucial to get the most out of a project. If it feels it needs to do so, Grupo Mexico will contract out leading companies in areas like engineering but the group will always very closely watch the fiscal conditions of each project it is involved in.

Salvador García pointed out that First Majestic has five operations in Mexico. “In all the years I have been working in the mining industry, this is not the worst crisis I have seen,” he asserted. He went on to inform about the situation of his company. During the upwards part of the cycle, he explained, companies grow and create non-essential job positions. Las year, First Majestic Silver examined non-essential positions and non-essential suppliers too in order to reduce costs. Garcia agreed with the fact that the size and scope of a company makes a difference. Juniors, for instance, survive on a da-to-day basis, so they cannot implement the same strategies as a large company in times of crisis. “This time of crisis is also a time of opportunity. We just need to think outside the box,” he said and added that the global situation invites companies to think about alternative, cost effective production methods. 

Can the Energy Reform Reduce Electricity Costs for Mining Companies?

César Emiliano Hernández Ochoa, Undersecretary of Electricity at SENER
César Emiliano Hernández Ochoa

Hernandez explained the basics of the Energy Reform and how this amendment can help the mining industry. The main goal of the Energy Reform, he stated, is to reduce the costs and price of energy. Transparency, promoting green energies, and encouraging investments through an attractive legal framework are also important elements of this reform, according to Hernandez. “Competitiveness is connected to a reduction of electricity prices,” he said as he displayed a graph that showed how electricity costs for the industrial and commercial segments are more than 100% higher in Mexico than in the US. “A reduction in power rates, even one of 30% in the industrial segment, would boost manufacturing by 6% annually,” he indicated. One year after the Reform, industrial rates saw a reduction of 20-30%. This was partly due to the rain levels of 2014, which boosted electricity production in hydroelectric plants. Low oil prices had a negative impact in the country, but a positive one on electricity prices, Hernandez said.

He highlighted the importance of removing barriers for private participation in the energy industry. “After the Reform, this option opened up and the impact this new wholesale market could have is huge.” Hernandez explained that Mexico took the best practices and models in the Western hemisphere to create a wholesale energy market, since Mexico was still following an industrial model from the 1970s. The clean energy targets set by the government will also foster the participation of private players in the electricity market, according to Hernandez. In addition, the construction of pipelines between the US and Mexico will enable the importation of natural gas that will be used for electricity generation at competitive prices. 

Best Practices in Tailings Management, Mine Closure, and Remediation

Best Practices in Tailings Management

Moderator: Luis Vera Morales, Partner at Vera & Asociados
Panelist: Rafael Dávila, Head of Mining Industry Latin America at ERM
Panelist: Arturo Rodriguez Abitia, Deputy Attorney for Industrial Inspection of PROFEPA
Panelist: Patrick Williamson, Principal Consultant and Manager of SRK Consulting Mexico
Panelist: Víctor del Castillo Alarcón, Director of Environment and Ecology at Grupo Mexico

Vera claimed that the environmental regulatory framework is functional and has been so for 40 years, although he indicated dissatisfaction with the Environmental Responsibility Law for aiming to take consequences beyond civil responsibility. He points out that the true scope of the law is unknown and compliance with environmental law is very expensive for most companies. The problems are created in day-to-day activities, he said, and the law does not address daily issues. For instance, the Environmental Responsibility Law indicates that the environment should be restored to the way it was before the accident or incident, a demand that ignores the nature of mining operations. Vera claimed that not having a reasonable law for environmental liabilities and externalities will result in high costs for everyone. “Previously, the law had a preventive nature,” he said and mentioned that the new law creates administrative confusion, is based on political reasons, has social costs, and separates law from science.

Davila talked about how environmental affairs related to mining are carried out in Peru, which adopted best practices from Canada. He said that management of residues can take down an entire mining operation, so attention should be out to this area. “Tailings dams receive residues from all stages of a mining process, so any procedure will affect the dams.” Davila went on to add this is also an energy issue, as technology has to be used to take and treat water in remote places. “Contention has to be environmentally and even economically sustainable,” claimed Davila.

Del Castillo commented the benefits of environmental discourses for political reasons, a position he does not condone. He stated that mining operations do not contaminate for the sake of it, since they produce something society needs. In his view, the media exaggerates mining related disasters without ever acknowledging the benefits of this industry. Del Castillo urged to change the general perspective of the mining industry, as this industry has an important social impact and should not be seen for its sporadic environmental accidents.

Williamson raised the question of what is acceptable when closing a mine, which should be agreed upon by mining companies and environmental authorities. He said Canadian companies constantly work on their closing plans, update these annually, and have funds contemplated for this purpose. He thinks it would be a good idea for mining companies elsewhere to adopt similar plans.

The moderator invited Rodriguez to talk about best practices, and the PROFEPA representative said the authorities are concerned about the environmental impact of mining. This industry, he commented, is seen as one of many economic activities in Mexico. This has an impact on the drafting of the regulations that govern the mining sector. One of the gaps that has not been covered in the environmental regulation is the closing of mining operations. Rodriguez said PROFEPA has inspected about 860 mining facilities, and 70% showed no deviations, which speaks well of the industry's compliance with the regulations. “Compliance might not be at 100%, but the figures are significant.” He said the behavior of the mining industry is similar to that of the chemical or the cement industry in terms of environmental compliance. The authorities, he told, not only interact with the mining industry through the law; it is also possible to negotiate and engage through voluntary programs. He concluded saying the mining industry complies with environmental regulations just as much as any other industr

Critical Success Factors for Suppliers and Service Providers

Critical Success Factors for Suppliers and Service Providers

Moderator: Gustavo Rodríguez, Operations Director for Mexico & Central America at Sumitomo
Panelist: Rene Valle Franco, General Manager Mexico of MacLean Engineering
Panelist: Ignacio García Albarrán, Vice-President Mexico & Central America and Director General Mexico of Cummins
Panelist: Richardt Fangel, Director General of FLSmidth Mexico

Rodríguez began by listing the three points this panel would discuss, technological development, operational safety, and the promotion of energy saving and sustainability. He spoke of how Sumitomo had a long reputation of supporting the mining industry and of technological breakthroughs in power transmission tools. Rodríguez stated the commitment of Sumitomo to the region as it will soon have three plants in Mexico (Mexico City, Guadalajara and Monterrey). He then turned to Sumitomo’s technologies, highlighting how these could help companies significantly reduce energy consumption and increase operational safety by the removal of certain technical parts such as couplings. In closing, he stated that the safety and energy consumption reduction offered by Sumitomo’s technologies makes it an ideal partner for the mining industry, as evidenced by the success of these technologies after having been deployed in numerous Latin American jurisdictions. Finally, Sumitomo’s advanced aftermarket service gives it a real edge over its competitors, stated Rodríguez, adding that his company’s real challenge was to convince the mining industry to try something new. He then turned to the panellists to assess how each of their companies had helped the mining industry in terms of technological development.

Fangel then took the floor to introduce FLSmidth’s contributions to this field and analysed the critical success factors for suppliers and service providers. First of all, Fangel reminded the audience that while cost reductions are an integral part of the mining value chain, these cannot come at the cost of technological advances. FLSmidth’s own research believe that the responsibility for technological innovation will be transferred down the supply chain, increasing its overall speed. FLSmidth also sees the way to develop such technology in-house since it has integrated its entire value chain, from producing raw materials to operations and maintenance. Essentially, said Rangel, FLSmidth’s philosophy is to follow the equipment fro grave to maintenance. However, buying equipment is but 10% of the entire industry, and Rangel warns against buying Chinese products, which are much cheaper but post a far greater risk. To improve Mexico’s ability to manufacture and develop more advanced equipment, the country’s human talent must also be developed to create economies of scale, a process which companies like FLSmidth must be a part of. As part of this, FLSmidth has opened the FLSmidth Institute which works with universities and is in charge of planning the company’s sustainable future.

García Albarrán, from Cummins, started that one of the most important aspects in Cummins for mining was the fact that it supplies dozens of mines across the country while maintaining industry-wide uptime. Once Cummins signs a contract, its people will be in a mine 24/7 and will treat all the issues that come up, from installation to maintenance. García Albarrán stated that some people also didn’t understand what they could afford and Perforadora. Once a client has been convinced to purchase Cummins goods, García Albarrán is confident that brand loyalty or a brand loyalty switch will take place, given Cumins’ contributions to energy control and standards all around the world.

Rene Valle Franco took over the mic and introduced the wholly Canadian company, McEwen Mining. He addressed the technological gap that is opening up in the Mexican mining industry. McEwen Mining is convinced that understanding the operations of its partners is the only way to make a tailor-made equipment solution for each of them. Although McEwen’s equipment is manufactured serially, the company has sought to standardized the operations, the management, and the products provided by itself and its trade partners. This involvement has allowed McEwen to figure out how to best support its partners. Valle Franco then explained that this careful attention to the needs of the market means that McEwen is also able to give significant guarantees that its equipment and technologies will be delivered and installed perfectly right from the start, so as to keep operations constantly working. This dedication also reaches McEwen’s human capital, which are trained for maximum efficiency. McEwen’s commitment to working with its partners, Valle Franco feels, should be replicated by the industry to help its overall development.

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